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8. Mr. V. K. Singhal appearing for the Revenue submitted that the facts and circumstances of the case were such which disclosed that it was a racket which was unearthed and the Department detected several cases where the Department has been defrauded and for this reason facts required to be looked into from a different angle.

9. It is submitted that when the documents were seized in the search, they pertained to the gifts made from Gangtok. On the next date of the search, the statement of Nathulal was recorded which was self-contradictory. When Ramjanki Devi was asked: about the gifts, she refused to have received the gift. Mahaveer Kumar had avoided giving a statement before the Income-tax Officer. It was found during investigation that persons in Gangtok were showing fictitious gifts made to Indian citizens. To illustrate, it was submitted that drafts were purchased in the names of persons who were non-existent such as one was in the name of one Mahendra Kumar alleged to have been written in the handwriting of Mahaveer Kumar. These drafts purchased in Jaipur "were sent to Gangtok. The Income-tax Officer found foul play after recording the reasons as contemplated by Section 148 of the Income-tax Act and initiated proceedings. The Department's case is that it was only after this when the petitioners came to know that they are in hot spot as the racket is unearthed, that they hurriedly filed revised returns admitting the said amount as income from "undisclosed sources". It is submitted that, in pursuance of the notices, the assessment orders have already been passed on March 27, 1989, and the petitioners' appeals are pending against those assessment orders. In the assessment order, it is submitted that the assessing authority has given a categorical finding that the returns cannot be considered to be valid revised returns under Section 139 of the Act and it was not a voluntary action of the assessees and they were guilty of designed concealments. The submission of learned counsel is that the assessees had not declared correct particulars in the original returns filed and had also not made honest statements under Section 132 of the Act and/or proceedings under Section 132 when the donors were required to be produced.